Jon Arnold
Jon Arnold is Principal of J Arnold & Associates, an independent analyst providing thought leadership and go-to-market counsel with a...
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Jon Arnold | March 14, 2017 |


Amazon Chime – Did AWS Buy the Wrong Company?

Amazon Chime – Did AWS Buy the Wrong Company? Questioning the difference between disruption and innovation in video collaboration

Questioning the difference between disruption and innovation in video collaboration

The recent debut of the Amazon Chime team video meeting service has drawn lots of attention and, as you may already have read about here on No Jitter, has led to a host of questions about Amazon Web Services' intentions. Here's another wrinkle that perhaps raises some more interesting questions as we all try to make sense of this shape-shifting space.

A week after the Amazon Chime announcement, I was part of a small group that attended CafeX Communications' analyst event, where a major focus was on its Chime video collaboration suite. I'll leave the branding and legal issues aside for now -- we can take that offline if you'd like -- and will instead focus on implications I think will be of more interest to No Jitter readers.

No Jitter bloggers already have covered the finer points of Amazon Chime, but having seen CafeX's Chime suite up close, some basic comparisons raise questions for me about the path Amazon has taken, along with what enterprises should be thinking about in terms of collaboration's business value. There's a strong contrast with one of these being disruptive and the other being innovative, and my view is that IT needs to consider how each aligns with strategic objectives. To illustrate, here are some key points of difference between the two Chimes.

Amazon Chime -- Disruptive, But Doing What's Easy
Most of AWS's messaging with Amazon Chime has been around taking the "frustration out of meetings," echoing what's been coming out of all the other vendors lately. Everybody is emphasizing ease of use, deployment, and buying, as well mobile-friendliness. So AWS isn't doing anything disruptive here but rather what's easy -- lowest common denominator to drive rapid adoption.

The appeal is that anyone can use it, and while that's great for getting workers to use collaboration platforms for the first time, it doesn't address the more complex needs that create the real obstacles to deeper forms of team work. For example, the free version gets your attention, but it only supports two people for basic video chat. To get any real business utility, you'd quickly be up to the Pro Edition, costing $15 monthly per user.

Once there, however, do not expect a true enterprise-grade experience. Being tied to AWS, Amazon Chime is totally cloud-based; while this suits AWS's way of doing things, Chime isn't really viable in environments with lots of legacy, on-premises systems. As is the case with Google G Suite, Amazon Chime offers no telephony service, so any audio conferencing needs will tack on costs for PSTN connectivity. Also worth noting is limited support across browsers and interoperability with other video systems, as well as firewall challenges, all of which will be problematic in complex, multivendor enterprise environments.

Finally, with persistent chat being central to today's collaboration experience, Chime is able to store your chat history, but cannot provide search. That limitation won't be problematic at first, but over time, it's a collaboration killer -- and it's a key reason why Slack has been so popular. Search is Slack's secret sauce, and is a prime example of how to be an innovator rather than a disruptor in this space.

So, how is AWS being disruptive? It's not the offering -- a Brady Bunch-style format for viewing who's on a call is not at all cutting edge. Amazon Chime is perfectly fine for small-scale, cloud-based meetings, but doesn't have enough differentiation or hooks to seriously challenge the established enterprise players. Rather, what's disruptive is AWS's go-to-market strategy. Cloud lowers the barriers to entry, especially when you run a massive public cloud. All AWS has to do is just drop Chime into the market and see what happens.

Aside from the unspecified cost to acquire Biba, the technology which is said to be the basis for Chime, AWS has nothing to lose and everything to gain as it seeks entry points for selling applications to enterprises. It is also being disruptive by partnering with Level 3 and Vonage as channels to market, thus minimizing its own risk. If Chime doesn't move the needle, AWS is free to move on and find another patch in the ecosystem to disrupt. If that matches up with your enterprise IT objectives, then look no further.

CafeX Chime -- Innovative, And Doing What's Hard
In contrast, CafeX has a strong philosophy of being an innovator, and its Chime suite is all about doing the hard things that address IT's real pain points around collaboration. For CafeX, Chime isn't just about WebRTC or the cloud. Across three variations in the Chime suite, it can do pretty much everything that Amazon Chime does but in a more inclusive and comprehensive manner. For starters, CafeX Chime goes beyond WebRTC's browser limitations by supporting all environments, including Edge.

CafeX offers a hybrid option for its Chime Meetings option, and has done the hard work of addressing various security policies around voice, video, and Web, facilitating access to meetings from inside or outside the office. It has addressed firewall issues, along with interoperability with gear from major players such as Cisco, Microsoft, Polycom and Zoom, along with SIP-enabled multipoint control units (MCUs). All told, this enables enterprise-wide collaboration for everyone, makes life easier for IT, and helps extend the utility of existing infrastructure, especially MCUs.

Without going further, it should be clear that CafeX Chime will speak more to what keeps IT up at night rather than what's easy to use for workers -- at least initially. While innovation can be disruptive, it's usually sufficient just to build a better mousetrap, and that's where CafeX has chosen a different path than Amazon. I'm pretty sure IT will generally take innovation over disruption, but the playing field isn't level given Amazon's dominance and CafeX's much lower market profile.

So, Did Amazon Buy the Wrong Company?
Interestingly, both companies got to this point via acquisition, with Amazon buying Biba in late 2016 and CafeX picking up Vayyoo early this year. Given the importance of time to market, it's not surprising that both companies decided to buy rather than build, at least for the core technology and patents. For AWS, Biba provided the platform allowing it to quickly wade into the collaboration space while the market remains fragmented. AWS has the clout to go up against anyone, and its business model gives it the luxury of being able to ride things out until the field narrows down, as it always does.

If Amazon truly wanted to be innovative, I would say it bought the wrong company. Vayyoo would not likely have been on its radar, but acquiring CafeX would have given AWS a lot more than Biba.

I don't know if CafeX was ever a potential target for Amazon, but there should be little doubt as to which platform truly addresses today's collaboration challenges. That said, AWS knows that having the best technology does not assure success, and given how fast this space is moving, other levers may ultimately be more important. If being disruptive is all that matters, then perhaps Biba was the right choice after all.

Time will tell, and no doubt Amazon has other plans for enterprise collaboration -- and maybe we'll learn more when Gene Farrell, VP of enterprise applications for AWS takes the keynote stage at Enterprise Connect 2017, coming to Orlando, Fla., March 27 to 30. But whatever unfolds, I'll still be rooting for CafeX.

If you haven't yet registered for Enterprise Connect, there's no time like the present. You can catch the AWS keynote, and visit AWS and CafeX -- plus nearly 200 other vendors -- in the Expo Hall. Register now using the code NOJITTER to receive $300 off an Entire Event or Tue-Thu Conference pass, or a free Expo Plus pass.


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